Israel Starts Tamar Gas Production

March 31 (Bloomberg) -- Israel started gas production at
the Tamar offshore field in an effort to put the country on the
road to energy independence and save a projected 1 billion
shekels ($274 million) a month, according to the government.

The gas was expected to reach Israel’s port city of Ashdod
by afternoon today, the Energy and Water Ministry said.

The field in the eastern Mediterranean Sea, estimated to
hold 9 trillion cubic feet of natural gas, is being developed by
a group that includes Noble Energy Inc., Delek Drilling-LP,
Avner Oil Exploration LLP and Isramco Negev 2 LP. Along with
Noble, Israeli energy exploration companies have discovered
enough gas under the Mediterranean over the past three years to
supply the country for 150 years.

“We are talking about billions of dollars coming to the
state from tax revenues from Tamar gas over a 20-year period,”
Gilad Alper, a senior analyst at Excellence Nessuah Brokerage
Ltd. in Tel Aviv, said in a phone interview. “It will also
reduce energy costs as we will replace expensive imports with a
cheap domestic supply of natural gas. The start of the flow is a
big positive for the economy.”

The Tamar and Dalit fields could supply Israel with gas for
two decades. The larger Leviathan field is estimated to hold 18
trillion cubic feet of gas, Noble said in a statement March 6.

“This is an important day for the Israeli economy,” Prime
Minister Benjamin Netanyahu said today in an e-mailed statement.
“We are taking an important step toward energy independence.”

‘International Player’

The three fields provide Israel with reserves more than 14
times larger than Germany’s total proven gas reserves, which the
BP Statistical Review of World Energy published in June 2012
lists at 2.2 trillion cubic feet. Russia holds the biggest gas
reserves, followed by Iran, according to BP Plc.

“This is the beginning of a new era,” said Isaac Tshuva,
controlling shareholder of Delek Group Ltd., which owns stakes
in Tamar via its Delek Drilling and Avner units. “The Israeli
economy will be able to exploit the advantages of natural gas
environmentally, geopolitically, socially and economically, and
turn Israel into an important international player.”

Qatar, the Persian Gulf emirate with the world’s third-largest reserves of gas, said on March 10 it found a deposit
with 2.5 trillion cubic feet of the fuel, its first discovery
since locating the world’s biggest gas field 42 years ago. The
North Field, shared with neighboring Iran, provides Qatar with
900 trillion cubic feet of reserves.

GDP Boost

The flow from Tamar is expected to contribute about 1
percent to Israel’s gross domestic product, the Bank of Israel
said in a March 24 report, forecasting that the economy will
grow 3.8 percent in 2013, including the contribution from gas.

The Bank of Israel also said the flow from the Tamar field
will improve the nation’s current-account balance by as much as
$3 billion this year. For every $1 billion improvement in the
balance, the exchange rate should appreciate about 1 percent,
the bank has estimated.

In February, Russia’s OAO Gazprom, the world’s biggest
natural gas producer, signed an agreement for the exclusive
rights to export liquefied natural gas produced from the Tamar
floating LNG plant. Noble Energy forecast Israeli demand for gas
to grow at a compounded rate of 15 percent in 2012-2017. The
Leviathan field is expected to supply the domestic markets in
2016, Noble said in December.